Questions linger about benefits of Obamacare

Saturday

Aug 3, 2013 at 10:00 PM

Special Report Day 1 | The Affordable Care Act: Judy Wolf left her longtime doctors about a year ago when she lost her health insurance, knowing she couldn’t afford to pay the full cost to see them. The Springfield woman has since gotten a new job but remains uninsured. She is among several Illinois residents who hopes the federal Affordable Care Act makes the cost of health insurance more reasonable.

By Dean OlsenThe State Journal-Register

This is the first day of a five-day series where GateHouse Media Illinois' heath care reporter Dean Olsen examines the Affordable Care Act and its expected impact. This series will be posted in its entirety at http://bit.ly/ACAseries. If you have questions about the ACA, email them to dean.olsen@sj-r.com. Olsen will round up the best questions and publish the answers in the newspaper and online in the coming days.

* County-by-county look at number of uninsured residents in Illinois (pdf)* A look at the number of uninsured Illinois residents eligible for the ACA (pdf)

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SPRINGFIELD -- Judy Wolf left her longtime doctors about a year ago when she lost her health insurance, knowing she couldn’t afford to pay the full cost to see them.

The Springfield woman, whose insurance coverage ended when she was laid off from her job as a dietary manager at a nursing home, has since gotten a new job at another nursing home. But she remains uninsured. She can’t afford her current employer’s $230 monthly premiums or a private policy.

Wolf, 46, hopes that the federal Affordable Care Act makes the cost of health insurance more reasonable — either through her job or through Illinois’ soon-to-be-launched health insurance exchange, called the Illinois Health Insurance Marketplace.

“I hope that it works,” Wolf said. “But I have that fear. I’ve heard it will be affordable. I’m hoping it will be affordable.”

Enrollment in the marketplace begins Oct. 1, and some of the most significant — and controversial — parts of the health-care law take effect Jan. 1.

However, financial penalties have been delayed until 2015 for a subset of those affected by the law: employers of 50 or more full-time-equivalent workers offering employee coverage that is inadequate or too expensive.

‘It will be messy’

Even though an estimated 70 percent of participants in the marketplace will receive federal assistance to afford premiums, co-payments and other out-of-pocket costs, it’s uncertain whether the marketplace’s prices for health coverage will pinch household budgets.

With Illinois on course to enact the ACA’s federally funded expansion of the Medicaid program and launch an insurance exchange jointly operated with the federal government, advocates of the law look forward to the end of lifetime benefit caps and no more use of pre-existing conditions in health-insurance coverage and pricing.

Some critics of the law say the recent decision by President Barack Obama’s administration to delay tax penalties for the so-called “employer mandate” is a harbinger of future problems in carrying out the 2010 law.

After previously calling for a full repeal of the ACA, critics now want Congress and Obama to delay in the law’s 2014 mandate that most Americans have coverage or face tax penalties.

Regardless of political orientation, just about everyone predicts problems, though perhaps not insurmountable problems, with the law next year and beyond.

“It will be messy,” said Laura Minzer, executive director of the Illinois Chamber of Commerce’s Healthcare Council.

Jim Duffett urged patience. He is executive director of the Champaign-based Campaign for Better Healthcare and a longtime supporter of the ACA who pushed for reforms brought about by the law even before Obama represented Chicago in the Illinois Senate.

“This is the largest and most far-reaching social program that has ever been implemented,” Duffett said. “There will be numerous hitches.”

Not a lot of time

The performance of Illinois’ marketplace will be closely watched. State insurance exchanges are a key component in the success of the health-care law, the president’s signature legislative achievement, in reducing the ranks of the nation’s almost 50 million uninsured residents.

Details about insurance policies to be sold through the online and in-person marketplace won’t be known until plans submitted to the state by insurance providers in April are approved by the federal government in late August.

That’s not a lot of time for the public, and particularly the 1.7 million uninsured people in Illinois, to learn their options for buying private insurance or qualifying for an expanded Medicaid program before enrollment in the marketplace begins Oct. 1. More than 40,000 of the state’s uninsured live in The State Journal-Register circulation area.

State officials believe that more than three-quarters of the Illinoisans who could benefit from the marketplace or the Medicaid expansion don’t have a clue about key provisions of the ACA.

In fact, a Kaiser Family Foundation poll this spring found that four in 10 Americans were unaware the ACA was even in force, 12 percent thought Congress had repealed it and 7 percent believed the U.S. Supreme Court had overturned it.

Gov. Pat Quinn, a Democrat like Obama and a strong supporter of the ACA, is determined to help educate Illinois residents about the law through a $35 million, federally funded marketing contract tentatively awarded to St. Louis-based FleishmanHillard, a Quinn aide said.

“It is an enormous, new program, but I’m confident that we will have the resources to get the word out, and it’s good news for people across the state,” said Jennifer Koehler, director of the Illinois marketplace. “We’re anticipating that a lot of additional people will have access to the health care that they need once they are insured.”

Cutting through the political debate and combating ongoing efforts by critics to disrupt the law’s implementation will add to the challenge of reaching 486,000 people who could sign up for the marketplace in its first year, Deputy Gov. Cristal Thomas said.

Koehler said what the governor “really wants to emphasize is that this begins Oct. 1 of this year. The information people have might be misinformation that we really need to start correcting.”

Details elusive

Zevernett Holloway doesn’t know whether the marketplace will put insurance within her reach or whether she will benefit from the expanded eligibility criteria for the Medicaid program. The expansion mainly will extend Medicaid to low-income adults who are not raising children.

A registered nurse, Holloway has high hopes for “Obamacare” but said she doesn’t know many of the details.

“I’m looking forward to what that’s going to be like,” said Holloway, 63. “I heard that it’s hard to understand.”

The divorced Springfield mother of three grown children has gone without health insurance for about five years. To reduce her stress level, she retired in December from a full-time job at a Springfield not-for-profit organization, where she taught students interested in becoming certified nursing assistants. The job didn’t come with insurance, and she couldn’t afford a private policy because of the cost of covering her high blood pressure and arthritis.

A ruptured appendix in 2009 and other health problems forced her to seek charity care from St. John’s Hospital in Springfield. She still owes about $20,000 to other medical providers, however.

All of the years working without health insurance were “very scary,” Holloway said. “What really got me through was my faith.”

Both Holloway and Judy Wolf now receive care from doctors at Springfield’s Southern Illinois University School of Medicine. SIU operates a federally subsidized health center for uninsured and other low-income patients. The clinic, at 520 N. Fourth St., charges as little as $20 for an office visit.

Who’s eligible?

Holloway doesn’t know whether her modest pension from a previous job will put her over the annual income limit to qualify for Medicaid. The cutoff will be about $15,860 per year, or 138 percent of the federal poverty level for one person (or less than $21,400 for a couple.)

If she fails to qualify for Medicaid, she could receive some of the most generous federal assistance for private insurance through the marketplace. The assistance is designed to keep the out-of-pocket cost of monthly premiums to 9.5 percent or less of household income.

Wolf, who is single, said she wonders whether she will be able to find cheaper coverage through Illinois’ marketplace.

It appears that the premium her employer charges employees for individual coverage — $106 every two weeks — represents 8.8 percent of her gross income of about $31,200 annually.

She considers the premium out of reach for her budget, but because the cost would amount to less than 9.5 percent of her gross income, the ACA might judge her employer’s coverage to be affordable. As a result, she might not qualify for a subsidy if she seeks coverage through the marketplace.

“I just hope it’s affordable insurance for everyone,” Wolf said.

She will, however, be subject to the individual insurance mandate.

It’s possible that federal officials will classify her employer’s premiums as unaffordable for workers who earn less than her. It’s also possible that her employer will reduce everyone’s premiums to avoid incurring potential federal penalties of $3,000 per employee per year. But such penalties wouldn’t begin until 2015.

Unreal expectations

For people seeking coverage through the exchange, federal assistance in paying for premiums will be available for people up to 400 percent of the federal poverty level, or $45,960 per year for an individual and $78,120 for a family of three.

But people at the lower end of the eligibility scale stand to benefit the most from the assistance.

Experts from The Robert Wood Johnson Foundation and Urban Institute wrote in October 2011 that only people at or below an income of 250 percent of the federal poverty level — or less than $28,725 for an individual and $48,825 for a family of three — will qualify for a combination of premium and cost-sharing subsidies that make coverage through state exchanges “as good or better than” employer-sponsored coverage (http://bit.ly/fedsubsidies).

Whether competition in Illinois’ exchange will make insurance more affordable for people not receiving the highest subsidy levels is uncertain, said John Michael Davis, a benefits specialist at Davis Financial Group in Springfield. He believes costs may be comparable with today’s prices.

Minzer agreed that many people checking out the exchange’s prices may be disappointed if they are not familiar with the cost of health insurance outside the workplace.

“There’s an expectation out there that this will be free or low-cost,” she said, “and it’s just not.”

Dean Olsen can be reached at (217) 788-1543. Follow him at twitter.com/DeanOlsenSJR.

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Paying for the Affordable Care Act

Tax-related changes in the ACA:

* Impose a tax on individuals without qualifying coverage.

* Exclude the costs of over-the-counter drugs not prescribed by a doctor from being reimbursed through a flexible-spending account, and limit contributions to FSAs to $2,500 per year, increased annually by the cost-of-living adjustment.

* Increase the Medicaid Part A tax on wages on earnings more than $200,000 for individual taxpayers and $250,000 for married couples filing jointly, and impose a 3.8 percent tax on unearned income for higher-income taxpayers.

* Impose an excise tax on insurers of employer-sponsored, high-end health plans, also known as “Cadillac” plans, effective in 2018.

* Impose new annual fees on the pharmaceutical-manufacturing and health-insurance sectors.

* Impose an excise tax of 2.3 percent on the sale of taxable medical devices.

* Impose a tax of 10 percent on the amount paid for indoor tanning services.

* Establish an independent payment advisory board to submit legislative proposals for reducing the growth rate in Medicare spending and slowing the growth in national health expenditures. The board is prohibited from recommendations that would ration care.